Transparency is key

New statistics from the Chartered Institute of Purchasing and Supply (CIPS) make for grim reading for anyone who thought last year’s horsemeat scandal would be the low watermark for UK companies’ supply chain affairs. Its latest survey of over 1,000 senior decision-makers has revealed some shocking home truths about the lack of accountability and transparency in supply chains.

According to CIPs, the vast majority (80 per cent) of those questioned said they can’t guarantee that their supply chains are free from malpractice. The most startling statistic, however, saw 11% admit that it was likely that slavery was taking place somewhere in their supply chains. A clear sign that, despite the furore over horsemeat, we have some way to go before UK consumers can have total faith that the products they buy are sourced in an ethical and sustainable way.

The figures are a reminder of an issue that is a fundamental part of the timber industry’s past and its future - stamping out the trade in illegal, unsustainable timber.

While the government is bringing forward new laws to tackle modern slavery, it has so far claimed that these will not ask companies to reveal forced labour in their supply chains. In their view, doing so risks placing too much of a burden on business. While I’m not by any means in favor of red tape for the sake of it, if the experience of the timber industry over the past two decades holds one lesson for other sectors, it’s that checks and balances, backed by punitive measures, are highly effective. They can not only root out the problem but also lead to an uplift in sales and consumer confidence.

The timber industry effectively had its horsemeat scandal two decades ago and since then great progress has been made to ensure products entering the UK are from sustainable sources. The latest figures from the TTF show that the share of certified timber stood at 90.7% in 2013, the highest level ever recorded.

This has been achieved through a combination of campaigning and protesting by external pressure groups, voluntary regulation - in the form of the FSC and PEFC schemes - and self-policing industry commitments, such as the TTF’s Responsible Purchasing Policy. This has now been followed by official regulation in the form the EUTR.

We’re not alone. Most industries that engage the services and goods of less developed countries – be it coffee, tea, fish, fashion, or food – have developed custody schemes that offer certain assurances around the journey of a product, which are designed to help consumers and businesses make more responsible purchasing decisions. Yet even with these certifications in place, instances of maltreatment of people and the environment persist, and timber is no exception.

In reality, these measures can only go so far. Market mechanisms cannot fully compensate for failed states and lack of governance frameworks. The fact that three quarters of respondents to CIPS’ survey admitted they had no visibility beyond the second tier of their supply chain, highlights the clear challenge in doing business in a global marketplace. But ignorance is not an excuse for failure, and the ultimate responsibility lies with companies to know and police their own supply chains.

As an industry, we have to go beyond combatting the symptom of the problem – illegal timber entering the UK – and look at the root cause. This will require greater investment in certified sustainable forestry practices in developing countries which lack the official governance frameworks we take for granted. To do this we must continue to develop a flourishing market for sustainable timber by extolling its many environmental and economic benefits in order to drive demand.

Initiatives like our Lifecycle Database (LCA) should play a key role in this, but we need the industry to come together to ensure the message is being communicated. As the market becomes more environmentally and socially aware, we should expect to see a growing demand for certified products, and more pressure being put on suppliers and producers to clean up muddied practices or risk losing business.

As the CIPS figures show, greater awareness of these issues coupled with a real commitment from those at the top to create positive change is needed to improve conditions for everyone.